Strategy

Alkemy is seeking to develop, construct and operate one of the world’s most sustainable producers of lithium hydroxide with a view to becoming a key supplier to the UK and European mobile energy market.

Strategy

Alkemy has identified a brownfields site in a well-established chemical engineering park located in Teesside, a major UK Freeport.

Alkemy has conducted initial high level due diligence into the feasibility of establishing a Lithium Hydroxide Monohydrate (“LHM”) plant at the site which will aim to initially produce 24,000 tonnes per annum, and up to 96,000 tonnes per annum, from lithium feedstock from various sources, to be sold to the UK and European mobile energy markets.

Whilst it would be possible to import and process a spodumene concentrate with the attendant materials handling and waste disposal issues it is viewed as only a near term option given the carbon.

Alkemy is currently reviewing several methodologies for the production of lithium hydroxide and it considers that processing LHM by either causticisation or electrochemical processing, will afford the Company with greater levels of output and are therefore the most suitable for the Company.

The proposed development timeline is based on progressing production by way of causticisation having achieved better results in recent studies and is also based on knowledge of the accelerated development timelines being achieved on other projects known to the Directors.

The anticipated timeline is as follows:

  • Class 4 Capex and Opex study - completed in Q1 2022
  • FEED - completed in Q3 2022
  • Long lead time procurement – Q3 2022 to Q2 2023
  • Financing - Q4 2022
  • Main Construction, subject to financing - Q4 2022 to Q4 2023.

Alkemy is currently in discussions with several potential providers of primary lithium sulphate feedstock and expects to make further announcements on this in due course.

Alkemy is also considering various funding options for the project including private equity, a structured bond and an institutional equity component and will update the market on this in due course. As it is intended to finance and operate the facility via its operating subsidiary TVL, if this is achieved it is anticipated that there will be no immediate dilution to Alkemy’s shareholders as part of the proposed financing process. 

LITHIUM HYDROXIDE MARKET

 Alkemy has recognised that China dominates lithium conversion capacity and increasingly is moving upstream to secure feedstock. The market for lithium hydroxide has been well articulated by many analysts with a consensus forecasting that it will go into deficit causing prices to rise significantly over the medium term.

It is also expected that Europe and the US will continue to use the higher performance NMC batteries which require a lithium hydroxide feedstock.

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